Uncle Sam’s Spending Spree Means Small Business Revenues

By Doña Storey

August 13, 2014

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As the government's fiscal year nears its end, federal agencies that had been spending conservatively are now flush with "sweep-up money" and looking to fill their product and service wishlists. For small-business suppliers, now is the time to revisit federal buyers and see if their needs align with your items. Experienced government contractor Dona Storey offers selling tips for suppliers.

As the federal government is in its fiscal fourth-quarter spending spree that ends Sept. 30, there may be opportunities that will significantly increase revenues and allow small businesses to scale up. In fact, as Deltek reports, more than 30 percent of annual federal government spending occurs in its fiscal fourth quarter, as many agencies that had been spending conservatively are eager to use the last of their funds for the year.

The federal budget environment of “use it or lose it” offers tremendous opportunities for both new and experienced federal contractors. Plus, as local government spending is trending down, federal dollars can help offset gaps in company revenues.

Don’t forget that certifications can be a small business’ best marketing tool at the end of Uncle Sam’s fiscal year. This is when federal agencies are looking at their performance ratings to see if they are meeting their small business and socioeconomic contracting goals. If they are behind, certified woman-owned Hzone (operating in a historically underutilized business zone) and serviced-disabled veteran-owned small businesses, for example, stand to benefit.

So how can small businesses capture federal dollars during the fourth-quarter surge in federal spending? Here are a few tips that will help even the most experienced contractor.

Be prepared. This is the time of year when government workers are known to be at their desks until midnight, so do whatever you can to make their sourcing and buying fast and easy. If you have a General Services Administration contract, make sure your GSA Advantage page is updated so agencies can clearly see what you sell as well as your capabilities. GSA contract-holders also need to pay close attention to e-buying opportunities that are offered through e-mail.

Get registered. Experienced federal contractors should update their profiles in the System for Award Management. For companies that are new to government contracting, they should create profiles in SAM, as it is the primary database of vendors doing business with the federal government.

Payment means. If you don’t already do so, consider accepting government credit cards, as it is another way that the government is able to buy from you faster and easier, and it also helps ensure you get paid in a timely manner.

So where do small suppliers find government procurement opportunities?

Revisit agency needs. Connect with existing federal customers and see if you can help them with their “wish lists.” You may be able to sell them products that they could not afford earlier in the year because they now have what is called “sweep-up money.” This makes the fourth quarter a great time to reoffer products or services that agencies were hesitant to buy in the first and second quarters.

Look at quick-sale items. Think of products that are easiest for a customer to buy. For example, if you are in the building interiors or furniture industry, market the items that require very little service or specifying, such as chairs. Also consider “quick-ship” items in your inventory, as these products may be appealing to agencies during the tight time frame.

Sell surefire services. If you are a service provider and have active contracts, listen carefully to customer feedback to see if there is any particular service where government buyers had an exceptional outcome and promote an expansion of those services. Remember that on existing, current contracts, the Federal Acquisition Regulation (FAR) allows contracting officials to expand existing scopes of work. It does not mean that they are going to double a contract, but you certainly have opportunities for expansion.

For sellers in the IT industry, there may be exceptional opportunities that lie ahead. Factors such as the government shutdown as well as many of the IT program failures that have come to light in 2014 may have the government taking a look at new or innovative ways to obligate its IT dollars.

A good rule of thumb for any contractor is stay in touch with buyers and therefore informed of their priorities as well as any problems they may be facing. Going to the negotiation table ready with a solution to a problem is always the best way to continue a relationship or even develop a new one in the federal marketplace.

Small business owners that have not been planning for this fourth-quarter surge need to take steps now in reviewing products and services to see if they align with some of the last-minute items on federal agencies’ shopping lists. The answer to the question “Do they need what I am selling?” is most likely always going to be “yes.” Now is the time to be proactive and take action.

Doña Storey is the American Express OPEN Advisor on Scale Up, advising entrepreneurs on how to find rapid growth through corporate and government procurement as well as helping large organizations scale their entrepreneurial partners to better meet demand in both the commercial and government marketplaces. She is an entrepreneur herself with extensive experience running and scaling up a business.